LTL Trucking for Ecommerce: The Business Benefits of Freight Consolidation
Your Ecommerce business has several options for getting your customers' purchases from your warehouse to their doors, regardless of whether you operate in the B2B or B2C sphere.
LTL freight shipping is one of the possibilities that could be worthy of your consideration. In this article, you'll be able to learn more about it—like what it is, how it works, and how it differs from parcel and FTL (full truckload) shipping.
We'll also explain why LTL can be of immense benefit to logistics and shipping strategies in both domestic and international, B2C and B2B Ecommerce settings.
What is LTL Shipping and How Does it Work?
LTL is an acronym for less-than-truckload, and is a method of transporting freight of any kind by road. As its name infers, this transportation method is of most benefit to businesses with relatively small quantities of goods to move from one location to another.
Many freight carriers make LTL services available to shippers with consignments too small to fill an 18-meter trailer. That said, definitions vary. In essence, any shipment that utilizes less than a truck’s full capacity can be categorized as a less-than-truckload.
The Mechanics of LTL Shipping
In broad terms, LTL shipping comprises the following steps:
1) The logistics company (LTL service provider) takes orders for shipping from businesses (clients) with goods heading for specific destinations within a city or region. These orders will all be for small quantities of goods, typically consignments in the 60 to 5,000 kilogram or one to ten pallet range. However, some LTL providers will handle shipments of less than 60 kilograms.
2) The logistics company groups these orders into a full truckload. This process is known in the industry as consolidation.
3) The logistics company receives the goods consignments from the clients into its warehouse and consolidates them onto pallets for transportation.
4) The pallets are loaded onto a truck.
5) The fully laden truck hauls the goods into the destination city or region.
6) The truck delivers the goods to a warehouse in the destination city or region. The goods are then unloaded, deconsolidated, and transferred onto smaller vehicles for last-mile delivery to individual customers.
Some LTL logistics providers operate domestic services, while others will handle cross-border shipments between countries connected by roads. An international LTL provider will typically include customs-clearance activity, including pre-import arrangements, in its service. Such an offering is invaluable to clients, as international shipping by road can involve several border crossings.
LTL vs. Parcel Shipping: What’s the Difference?
As an LTL shipper, you won’t need to concern yourself too much with the technical details as defined above. It should be sufficient to be aware of the differences between LTL and the parcel shipping services you might currently use. In practice, they are few.
For example, parcel shipping systems are designed to operate directly between the shipper and the recipient. Meanwhile, LTL solutions take the more cost-effective approach of consolidation and transfer through a network of warehouses.
In effect, this means that, depending on your provider, you may be able to have your customers’ orders collected from your warehouse on-demand. However, some providers will expect you to assemble orders in batches for collection at predetermined times and frequencies.
In the case of international shipments, your customers might need to wait a little longer for their deliveries than when using parcel shipping. That is an issue that’s more pronounced in international logistics scenarios, since parcel services often carry shipments by air while LTL transportation is entirely by road.
A Summary of LTL Shipping Benefits for Ecommerce Businesses
Due to the slightly longer transit times involved in LTL shipping, it may not suit your business if you’re committed to next-day delivery. However, in international or cross-border ecommerce, such rapid delivery is not yet in most customers’ lists of expectations.
After all, even purchases sent via parcel service must spend time in customs clearance, which typically adds days, rather than hours, to transit time.
In an international setting, then, the few extra days entailed by LTL shipping might be a small trade-off against the potential benefits to your business.
But what are those benefits exactly? In brief, they include:
- Logistics cost savings (when compared to the cost of parcel services and full-truckload shipping)
- The security of palletization
- Accurate live shipment tracking
- Access to value-added services
- Environmental advantages
- Scalability Now let’s look at some of those benefits in more detail to help you decide if LTL is the right shipping mode for your ecommerce enterprise.
How LTL Shipping Can Save Money for Your Business
The possibility to save on logistics and shipping costs is probably the most notable benefit of LTL shipping for ecommerce enterprises. If you ship merchandise to customers abroad, these savings could be substantial, provided the destination countries are connected to yours by road.
There are several reasons for this. For instance, LTL does not involve shipping by air, which is the most expensive transportation method. While economies of scale enable parcel carriers to keep costs down for shippers despite the industry’s air transport use, shipping entirely by road is even less costly.
The Cost Benefits of Consolidation
LTL carriers, too, achieve economies of scale. They do so by consolidating many LTL shipments into full truckloads, which maximizes vehicle utilization and reduces the number of journeys and vehicles required to ship their clients' goods.
As an LTL client, your business can save money by consolidating your customers' orders and dispatching them every few days as LTL shipments.
Of course, that does require your customers to wait a few days to receive their purchases. Nevertheless, your transportation costs will be less than if you ship orders individually with a parcel carrier. That’s because by consolidating, you will reduce your costs per-unit-shipped.
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If your business ships exclusively within national boundaries, you’ll be pleased to know that consolidation-driven savings are not restricted to international ecommerce. They may also apply to domestic sales when you compare them against parcel services costs.
Furthermore, domestic LTL shipping will undoubtedly save money if you’re currently using full-truckload services and don’t always manage to fill your provider’s vehicles. Switching to an LTL service could drive your costs down dramatically.
That’s because instead of footing the bill for the entire cost of running a large goods vehicle, LTL requires that you pay only for the portion of the load space that your goods occupy.
LTL's shipping flexibility makes it suitable—and a logistics cost saver—for B2C and B2B businesses alike. Most LTL providers can move shipments of any size and are willing to deliver both to consumers and business premises and warehouses.
The Security Benefits of LTL Shipping
LTL shipping can help keep your merchandise secure and in good condition as it moves from your warehouse into your customers’ hands. That’s because LTL freight is typically packed snugly into crates or onto pallets, and secured with shrink wrap.
The result is a lower likelihood of losses compared to the loose packing methods of parcel shipping. Similarly, your shipment’s contents are unlikely to suffer damage that might otherwise be caused by contact with other freight during the transportation process.
LTL Shipping Offers More Service Options
It’s often possible to access a broader range of service options with LTL shipping than a parcel carrier might offer. For example, some LTL transport providers will:
- Provide trucks equipped with lift gates for loading and unloading bulky items
- Offer refrigerated or even heated (to prevent freezing in cold climates) shipping and delivery for temperature-sensitive items
- Perform white-glove services, for instance, to include installation of items on your customers’ premises
- Live shipment tracking is another option that’s increasingly available from LTL providers. The latest track and trace technology ensures that you and your customers know where a consignment is and what’s happening to it at any given moment during shipping.
The Versatility and Scalability of LTL Shipping
Aside from the service options outlined above, LTL shipping can add versatility to your shipping operation in other ways. You don’t have to use LTL exclusively, for instance. Instead, you can incorporate it into your customer service offering to broaden the range of options for your patrons.
One way to do this is to offer a tiered shipping service. For the premium tier, you could use parcel carriers to minimize delivery time. Partnership with an LTL logistics provider could enable a less critical service level for customers who don’t want or expect urgent delivery.
Perhaps your customer orders vary widely in terms of volume and weight. In this case, you may wish to ship small items and orders via a parcel service and use LTL for bulky or heavy items and orders comprising larger quantities of goods.
LTL is also eminently scalable due to the range of shipment sizes that can be accommodated. As your ecommerce enterprise grows, you can increase the size of your consolidated shipments with ease.
Suppose you wish to expand your market into new geographies. In that case, you can see if your service provider carries goods into those regions or find an additional provider, which does service those areas, to add to your partner portfolio.
An Environmentally Friendly Shipping Option?
For ecommerce practitioners concerned about reducing carbon footprint, LTL shipping is arguably one of the more environmentally friendly shipping methods available. The comparison of emission levels by transportation mode is a complex topic due to the range of scenarios and the variance involved. However, there’s little doubt that consolidating small shipments into full truckloads reduces the vehicles and journeys required to deliver your customers’ purchases. That makes LTL worth exploring if sustainability features in your list of company values.
LTL Shipping: Is it Right for Your Ecommerce Business?
Like any logistics strategy, mileages vary for businesses trying different shipping methodologies. There is no guarantee that LTL shipping will be the best option to meet your particular business needs. However, the knowledge we’ve shared here should help you weigh up the advantages and factor them into your strategic thinking.
Is your ecommerce business based in the United Arab Emirates? If so, Shipa Delivery’s new LTL service could help you lower costs and improve your service offering to customers in Saudi Arabia and Kuwait.
A one-stop-shop for cross-border ecommerce logistics, our solution includes pre-import arrangements and customs clearance at the border. We collect from your warehouse and consolidate your deliveries before speeding them to their destinations in Kuwait and the KSA.
To learn more about LTL shipping with Shipa Delivery, reach out to us at our Help Center. One of our logistics experts will be pleased to get in touch and answer your questions.